Here are the 2 big things we're watching in the stock market in the week ahead

CNBC Finance

5 min read

We're in the final stretch of 2025 and entering the second week of the historically strong market month of December. Barring a calamity, the S & P 500 should be able to turn in a third straight year of gains. The index has advanced nearly 17% year to date. Whether it goes higher from here or retreats depends on what happens this week. The Federal Reserve's last scheduled policy meeting of the year, set for Tuesday and Wednesday, is one of the big events we're watching in the week ahead. It's also likely to be the most consequential. The other one is earnings from two portfolio names, Broadcom and Costco , both reporting after Thursday's closing bell. 1. Fed meeting : There is little drama over whether the Fed plans to cut interest rates on Wednesday afternoon. The market has priced in a quarter-point reduction, which would be the third such move this year. What investors are keen to find out is how many central bank policymakers dissent and what they see for the economy in 2026. The Fed puts out a summary of economic projections four times a year, and the December meeting release is the last one for this year. While what Fed Chairman Jerome Powell says at his post-meeting news conference will also be scrutinized, will it matter as much as it normally does? We know his tenure as Fed chief is winding down, ending in May, and President Donald Trump has made no secret that he thinks Powell should be cutting rates more aggressively. The president at last week's cabinet meeting said he plans to name Powell's successor early next year after he told reporters a few days earlier that he knows who he's going to pick. National Economic Council Director Kevin Hassett is seen as the favorite. Whoever takes over for Powell will find themselves in a quandary as they look to find the sweet spot on rates with both sides of the Fed's dual mandate at odds. Inflation is stubbornly holding above the central bank's 2% long-term target, and the job market is weakening. 2. Earnings : According to FactSet, with 99% of S & P 500 companies in, 83% reported better-than-expected earnings and 76% reported better-than-expected revenue. Tech led the way with 94% of companies outpacing earnings expectations and 89% beating on revenue. The sector with the biggest earnings upside versus expectations, however, was the industrials. The last few stragglers are set to report quarterly results this week. Starting with Broadcom, we're certainly interested to hear about the dynamics surrounding custom AI chip demand, following the release of Google's Gemini 3, which is being hailed as the leading large language model. Gemini 3 was trained and runs exclusively on Google's seventh-generation tensor processing units (TPUs), which were co-developed with Broadcom. Outside of custom chips, Broadcom's networking sales are likely to garner a lot of attention as this is where the bulk of artificial intelligence demand shows up, given the need for interconnect solutions that comes with the move to a rack-scale architecture in data centers. Management's forward guidance into 2026 will also be a key watch item. As of Friday, according to LSEG, the Street is looking to Broadcom's fiscal 2025 fourth quarter earnings-per-share (EPS) to increase 31% year-over-year to $1.86 on a 17.5% gain in revenue to $17.49 billion. As for Costco, our focus will be on the commentary from management as it relates to tariffs â which the company is suing the Trump administration over â foot traffic, and what they are seeing in terms of customers' basket size and mix. Costco publishes sales data monthly â so, while we do value the additional information we get when it comes to the sales mix, along with profit margin dynamics, the headline revenue number tends to be less of a focus than what we see with other companies. Outside of the reported quarter, updates on Black Friday and Cyber Week sales will help sharpen our understanding of consumer health and, in turn, the economic outlook for 2026. As of Friday, according to LSEG, the Street is looking to Costco's fiscal 2026 first quarter EPS to increase 5.8% year-over-year to $4.28 on an 8% gain in revenue to $67.17 billion. (Jim Cramer's Charitable Trust is long AVGO, COST. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

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Here are the 2 big things we're watching in the stock market in the week ahead

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